Monday Morning Cup of Coffee: Flippers are back with cash in hand
A look at stories across HousingWire's weekend desk, with more coverage to come on bigger issues:
Servicers continue to capture the heat of economists and researchers who claim new data shows servicing shops were not equipped to process millions of loan modifications in the wake of the mortgage market meltdown.
The Chicago Tribune elaborated on a report from the University of Chicago Booth School of Business and the National Bureau of Economic Research this past week.
The report claims even under the best of circumstances, the government's loan modification program could have helped 3 to 4 million households. Yet, their best possible performance amounts to just one-third of that figure.
The low expectations and turnout is attributed to servicing shops not having the support and operations needed to handle the influx.
Real estate flippers have returned to the market with cash in hand. The latest Foreclosure News report from RealtyTrac says flippers are back. But unlike the shaky days of the late real estate boom, flippers are playing it safe and buying properties with cash rather than financing them.
In turn, they are spending tens of thousands of dollars in renovations to later sell the cash-bought homes at a profit. Octavio Nuiry with RealtyTrac documents the development, saying "Flipping is big business. Nationally, investors flipped 99,567 homes in the first six months of 2012, up 25 percent from the 79,826 flipped properties in 2011."
Three states have signed onto a contentious lawsuit challenging the legality of the Dodd-Frank financial reform bill, The Hill reported. Michigan, Oklahoma and South Carolina officials signed onto the suit, claiming the bill gives the Treasury too much power to liquidate a failing bank without having to consult with impacted states.
Michigan Attorney General Bill Schuette is quoted in the piece as suggesting that Michigan alone has much to lose with its public-employee pension funds maintaining large investments in systemically important banks.
No new bank failures were recorded by the FDIC in the past week.
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